Windfall tax for major companies to be introduced in Russia

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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 3.12.2003

Ruling of the Constitutional Court of the Russian Federation No. 384-O of October 2, 2003 on the Refusal to Accept for Consideration the Appeal of the OOO Design Group "Interyer Flora" against Violation of the Constitutional Rights and Freedoms by Item 3 of Article 161 of the Tax Code of the Russian Federation

According to the applicant, the courts apply incorrectly the norms of the tax legislation pertaining to VAT amounts transferred by the lessee when leasing state property. Since the lessor is not a taxpayer, the lessee must not bear the duty of a tax agent, and there is no obligation to pay the value added tax to the budget. Besides, the absence of his right to claim for offsetting the monetary resources collected by the tax bodies means a deprivation of the property of a legal entity contradicting the Constitution of the Russian Federation.
According to the Constitutional Court of the Russian Federation, VAT collection in cases of public property lease is stipulated by the fact that there emerges an object of taxation, i.e. operations of sale of services characterised by a money measure, the presence of which is associated in the legislation on taxes and fees with the duty to pay the tax emerging with the taxpayer. Exemption of such operations from taxation would mean a withholding from the common legal regime incompatible with the constitutional principles of economic neutrality of taxes and equal acknowledgement and protection of the private, state, municipal and other forms of property. VAT exemptions may apply to a lessee of the state and municipal property only in the presence of the documents confirming VAT payment.

Decree of the President of the Russian Federation No. 1417 of December 1, 2003 on the Amendments to Some of the Decrees of the President of the Russian Federation Pertaining to Improvement of State Management in the Sphere of Migration Policy

The changes are stipulated by the handing over of the functions of the federal body of executive power in charge of the migration policy to the Ministry of Internal Affairs of Russia. The Decree specifies that the loss of a political asylum is determined by the Commission for Citizenship Issues of the President of the Russian Federation to the presentation of the Ministry of Internal Affairs of Russia on the basis of statements of the Ministry of Foreign Affairs of Russia and the Federal Security Service.
The Decree is entered into force from the day of its signing.

Decision of the Government of the Russian Federation No. 725 of November 29, 2003 on the Prolongation for the Year 2004 of the Period of the Experiment on Introduction of the Uniform State Examination

The experiment on the introduction of the uniform state examination envisaged in the Decisions of the Government of the Russian Federation No. 119 of February 16, 2001 and No. 222 of April 5, 2002 is prolonged for the year 2004. The experiment envisages integration of the state (final) certification of the graduates of institutions of general education and the entrance examinations to the institutions of higher and secondary professional education.

Decision of the Government of the Russian Federation No. 720 of November 29, 2003 on the Tariff Regulation of the Import of Raw Sugar and White Sugar in 2004

Changes the nomenclature of the rates of import customs duties for raw sugar and white sugar. The rates for raw sugar are differentiated depending on the average monthly price per ton at the New York commodity exchange. The average monthly price is estimated on the monthly basis as a simple average price for raw sugar at this exchange for the current contract for all tender days (as of the moment of closing of the tenders).
The new rates of the import customs duties for the white sugar are fixed in US dollars per ton (earlier, in euros per kg).
The Decision is entered into force from January 1, 2004 with exceptions.

Decision of the Government of the Russian Federation No. 718 of November 29, 2003 on the Endorsement of the Regulation on the Application of the Uniform Rates of Customs Duties, Taxes for Commodities Moved across the Customs Border of the Russian Federation by Natural Persons for Personal Use

Defines the procedure of application of the uniform rates of customs duties, taxes for commodities intended for personal, family, household and other not pertaining to entrepreneurial activities needs of natural persons moved across the customs border of the Russian Federation. Commodities intended use is determined by the customs bodies from the application of the natural person of the moved commodities, their nature, quantity and frequency of transportation.
It is permitted to import without duties and taxes in unattended and attended luggage commodities (except for the transport vehicles) with the total cost not greater than Rbl 65,000 and total weight not greater than 50 kg. It is also permitted to import duty free cultural values under the condition of their declaring in writing and special registration.
If the mentioned dimensions are exceeded (however, not greater than Rbl 650,000 and 200 kg), the uniform rate applies in the amount of 30% of the customs cost, however, not less than EUR 4 per kg of excess values. If even these dimensions are exceeded, the rates envisaged for foreign trade participants apply.
For automobiles, differentiated rate applies depending on the country of origin, cost, age of the automobile and engine capacity. The cost of an automobile under 3 years of age implies the selling price for this or similar automobile or suggested selling price under usual retail-trade conditions of full competition. The mentioned price is determined on the basis of information obtained from automobile producers, and if such information is not available - from catalogues, information of foreign organisations selling automobiles and other independent sources of price information available with the customs bodies.
The Decision lists the cases when automobiles may be imported duty free.
Natural persons may get commodities delivered in international postal dispatches without paying the customs duties, taxes if the cost of such commodities delivered within one week for one recipient is not greater than Rbl 10,000. The Decision lists the commodities that may be imported to the Russian Federation in limited amounts by natural persons 17 years of age and older without paying the customs duties, taxes.

Decision of the Government of the Russian Federation No. 694 of November 19, 2003 on the Endorsement of the Regulation on the Handing over for Sale or Destruction of Perishable Confiscated Items Being the Objects of Administrative Violations

Decision on the handing over of confiscated items for sale is taken by the body of executive power entitled to confiscate the objects of administrative violations after their examination and quality checking. The person possessing confiscated items is notified of the adopted decision, after which confiscated items are handed over to the Russian Federal Property Fund for sale. Assessment of the confiscated items is carried out on the basis of their market value. The person possessing confiscated items is notified of the carried out assessment and is permitted to be present during the assessment procedure.
Destruction of the confiscated items is carried out on the basis of the statement of the expert of the state enforcement and control body using any technically available method while observing the requirements of the normative and technical documents in the sphere of environmental protection. All expenses pertaining to the destruction of the confiscated items are paid by the authorised body of executive power having taken the decision on destruction. If the person possessing the confiscated items is found guilty of committing the violation, he has to reimburse the mentioned expenses to the authorised body of executive power.

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